Residential laws

Victoria’s long-awaited residential tenancy reforms hit the table in the state parliaments lower house this week. But while Premier Daniel Andrews said the reforms would be the biggest change to the states residential tenancy in 20 years, missing in action was any requirement for minimum energy standards and thermal comfort.

The second reading of the Residential Tenancies Amendment Bill 2018 took place today [Thursday], and the policy shift will now be up for debate and further industry stakeholder discussion.

The headline issue for most media outlets has been the proposal to give tenants the right to keep a pet, unless the landlord obtains an order from the Tribunal to forbid it.

The headline issue for sustainability advocates, however, is what the bill is missing – minimum energy efficiency and thermal comfort standards.

Victorian Premier Daniel Andrews said the reforms were the biggest potential change to the state’s residential tenancy in 20 years.

The process leading up to this week’s final draft saw extensive consultation, with tenant groups advocating for longer leases, the right to make minor modifications, and minimum performance standards for energy and comfort.

Longer leases are another wish-list item missing from the bill in its current form.

Minor modifications are allowed in the bill as long as the premises are returned to their original condition when the tenant vacates.

For modifications that are more than cosmetic, the proposed reforms state that a landlord may not “unreasonably refuse” a request from a tenant to make minor modifications at the tenant’s own expense to improve the property’s energy efficiency or thermal comfort.

Other changes in the bill include a requirement for landlords to ensure homes have adequate security in the form of door and window locks, a functioning stove for cooking, and that homes meet applicable standards for safety of electrical, gas and smoke alarm systems.

The need for landlords to make sure properties have heating was also announced by the government prior to the bill’s tabling in Parliament.

While this has not been specified within the current text of the bill, a spokesman for Minister for Consumer Affairs Marlene Kairouz confirmed it was part of the reforms.

The detail, however, is possibly yet to be finalised pending stakeholder consultation, he said.

Mr Andrews said the reforms deliver on the government’s promise to make renting fair.

“These reforms will help ensure everyone who rents has a safe, secure and affordable home to call their own,” he said.

Energy efficiency experts want to know why the Act has not set down minimum energy efficiency standards, why there is no clarity around the type of heating and what performance standards it will need to meet, and why cooling has not been made mandatory.

Independent energy assessor Tim Forcey told The Fifth Estate there should definitely be mention of cooling as well as heating.

The type of heating should also be specified.

For achieving energy efficiency and the wider goal of reducing emissions from the built environment, the logical answer for both heating and cooling would be the installation of reverse cycle air conditioning, he said.

As well as delivering an efficient solution, the improved thermal comfort in rental properties “might save a few lives” from the impacts of extreme heat and extreme cold.

Senior energy analyst for the Alternative Technology Association, Dean Lombard, said it was hoped something basic around minimum energy performance standards would be included in the reforms.

The best option would have been to have requirements that enabled progress towards mandatory standards, he said.

As it stands, in the explanatory memorandum that accompanies the bill, the use of the term “efficiency” was clarified, stating it is being used in such a way that it allows for possible future energy efficiency and water efficiency standards.

Mr Lombard said the proposal for mandatory heating “is a start”.

“Any house without heating in Melbourne is sub-standard,” he said.

Down the track, the government will need to “get more specific” about what types of heating, and the performance standards for it.

He would also hope to see some star rating requirement for any heating in rental properties.

Water appliances need to have efficiency standards

Water appliances have already been singled out as needing to meet standards for efficiency if the landlord is to have the tenant pay water consumption charges.

Mr Lombard said he thinks cooling has not been mentioned by the government as a requirement because “it is seen as a luxury”.

“But it isn’t, especially in poorly performing houses.”

The resi agents are not happy

The Real Estate Institute of Victoria’s (REIV) response to the reforms was scathing, describing them as “nanny state” changes.

REIV Pesident Richard Simpson said the government’s actions will deplete the already-low pool of rental housing stock in the state. He said this was because landlords will pull out as “it is becoming all too hard and too much of a risk.”

As well as objecting to the right to have pets and the right to make minor modifications, REIV objects to the withdrawal of the 120 day “no reason” notice to vacate provisions, and a proposal to cap bonds at four weeks’ rent which would see bonds on par with those required in New South Wales, Queensland and the ACT.

“There is no doubt that Rent Fair in its current form will result in greater screening of applicants and increased rents,” Mr Simpson said.

“Numerous members have already told us they will remove their investment property from the private rental market if these reforms are passed.”

Industry observers have noted that if there is a sudden dumping of investment housing stock due to the reforms, this could in fact be a windfall for those currently renting due to lack of properties to purchase in the inner and middle ring suburbs.

“Rents are not about the quality of the home,” one expert told The Fifth Estate.

“They are about the location mostly. You see homes of varying quality in the same area all charging pretty much the same rent.”

  • Read the text of the bill and explanatory memorandum here

Leave a comment

Your email address will not be published.